Ways to ensure land resources in Hong Kong respond to the city’s social and economic needs

There has been much written regarding the “shortage of land” in Hong Kong and many suggestions as to how government should make more land available to meet Hong Kong’s residential, commercial, recreational and innovation/technology needs.

However, few, in my view, address the nub of the problem and I would therefore like to put forward my own views on what a determined administration could and should do to address the issue of land supply in the city in ways that do not undermine the existing platform of values yet provide a more reliable and measurable stream of supply to meet the ever-widening range of uses that defines an international city of the reputation of Hong Kong.

First things first – we are not short of land in Hong Kong (assuming adoption of sustainable population growth policies). However, due to the prescriptive nature of our land-conversion processes, the failure of the administration properly to manage land resources and, in particular, the absence of an aspirational vision for the future of the city, it has proved impossible to persuade the community that some degree of inconvenience, even sacrifice, in the short/medium term, will result in a better future for all and this has led to strong public resistance to many new development proposals.

In his 2016 policy address, Chief Executive Leung Chun-ying acknowledged: “What Hong Kong lacks is not land but land that is developable. The root of many social, economic and livelihood issues often lies in the fact that land planning and development fail to keep pace with the growth in demand”.

As background, the current long-term housing target is 460,000 units between 2016 and 2025 with 40 per cent (i.e. 180,000 units or 18,000 per year) being built by the private sector and 60 per cent (280,000 units ) being provided by the public sector, of which 200,000 will be rental and 80,000 subsidised purchase. However, in 2015-2016 the anticipated completion of Public Rental Housing units is 34,500 (c/f the target of 40,000) and of subsidised flats for sale the expected completion is 3,000 (c/f the 18,000 unit target). Land sold for private sector development during 2015-2016 will deliver a total of 20,300 units as and when these are completed, i.e. above the annual target but not for two to three years.

Residential sales in 2015 totalled some 56,000 units, with 15,000 primary market and 43,000 secondary market transactions, while resales of Home Ownership Scheme (HOS) units totalled 4,196 units, down 30 per cent on the 2014 figure. In addition to this supply, the Urban Renewal Authority offered units in its Kai Tak development at 20 per cent below the market and targeted relocation and singles, while the Housing Society introduced Tanner Hill, its lifelong rental scheme targeted at the over 60s. In addition, 25,000 private sector units could potentially be launched this year.

So where will all the land come from to meet the new targets?